Culture and Economy

In traditional academic discourse, culture and economy have long been regarded as separate analytical spheres: on the one hand, the realm of shared cognitions, norms, and symbols, studied by anthropologists; on the other hand, the realm of self interest, where economists reign supreme. Though the two disciplines overlap occasionally (in economic anthropology mainly), radical differences in the conceptual and methodological routes each field followed during the twentieth century have prevented any sort of meaningful exchange.

Outline

By contrast, the interaction between culture and the economy has always been a central component of sociological analysis. All the founding fathers of sociology were, one way or another, interested in the relationship between people’s economic conditions and their moral universe. In his famous presentation in the Pre face to a Contribution to the Critique of Political Economy, for instance, Marx described ‘‘forms of social consciousness’’ essentially as an epiphenomenon of material relations. Later inter pretations, however, have suggested that even for Marx and Engels the relationships between ‘‘material base’’ and ‘‘superstructure’’ were far from deterministic. The ‘‘western’’ Marxist traditions that developed in Europe after World War I proposed a somewhat more sophisticated analysis that emphasized the integration of culture into the apparatus of domination – either because the hegemony exerted by bourgeois culture induces the masses into implicitly consenting to their own economic oppression (Gramsci 1971), or because the incorporation of culture into the commercial nexus of capitalism leads to uniformity of spirit and behavior and the absence of critical thinking (Adorno & Horkheimer 2002). Still, in these formulations culture remains wedded to its material origins in capitalist relations of production.

Partly reacting against what they perceived to be a one sided understanding of the relationships between base and superstructure in Marxist writings, Weber and Durkheim both sought to demonstrate the greater autonomy of the cultural realm, albeit in quite different ways. Both insisted that people’s behavior is always infused with a meaning that is not reducible to their material positions. Weber (2002), more than anyone else, demonstrated the influence of preexisting ideas and, in particular, religious worldviews on the economic conduct of individuals. For instance, even though their actions may look rational from the outside, the behavior of early Protestant capitalists was quite illogical from the inside: anxiety about salvation, rather than self interest, motivated them to accumulate. In other words, their search for profit was not based on instrumental rationality, but it made psychological sense given the religious (cultural) universe in which they lived. In fact, Weber considered that all religions condition individual attitudes toward the world and therefore influence involvement in practical affairs – but, of course, they all do it differently, so that the ‘‘economic ethics’’ of individuals varies substantially across social contexts.

It is Durkheim, however, who best articulated the collective basis of our meaning making orientation: groups of individuals share certain understandings that they come to take for granted in their routine dealings with each other. Hence how people behave, including in economic settings, is not a priori reducible to a set of predetermined individual preferences and the interests they support. Rather, most of people’s actions are motivated by habit and routine; and preferences, as well as the institutions they support, are informed by cultural norms (Meyer & Rowan 1977). In each society, then, culture and institutions act in tandem to shape individual consciousness and thereby representations of what is understood to be ‘‘rational.’’ This is what DiMaggio (1994) calls the ‘‘constitutive effect’’ of culture. Because these mental maps are widely shared, they have much greater efficacy than others that would be out of place, or misunderstood, in the same context.

Cultural Shaping of Economic Institutions

As a system of representations that exists separately and independently of individuals, culture may shape economic behavior in many different ways. It may be more or less institutionalized. Corporate cultures, for instance, are often highly formalized, even bureaucratized, but the rules that underlie bazaar interactions, though obviously codified, remain very informal (Geertz 2001). Second, the effect of culture may be more or less profound. Meyer and Rowan (1977), for instance, have famously suggested that many organizational rules are adopted in a purely ceremonial way, but have little impact on actual practice – a claim that has been notably supported by research on educational institutions and hospitals. On the other hand, substantial evidence has come out of cross national studies of a deep patterning not only of economic values and norms (Hofstede 1980), but also of economic institutions and organizations (Dore 1973; Hamilton & Woolsey Biggart 1989). The critical question, then, is whether the two are related, and how.

One possible answer has been provided by Dobbin’s (1994) suggestion of the existence of an elective affinity between economic and political culture (see also Beckert 2004). In his comparative analysis of the development of the railway sector in the nineteenth century, Dobbin shows that public officials in three countries sought to achieve economic growth in very different ways, and were influenced in doing so by their cultural perceptions about the nature and sources of the political order in their own nation. In the US, they strove primarily to protect community self determination; in France they oriented themselves towards centralized planning by the state in an effort to avoid logistical chaos; and in the UK they were mainly concerned with protecting the individual sovereignty of firms. Ultimately, then, the economy of each country ended up ‘‘reflecting’’ the polity it originated from.

Some sociologists, however, would argue that there is no such inherent consistency to national cultures. Biernacki (1995), for instance, finds that the process of their formation is eminently fragile, almost serendipitous. In his comparative study of textile mills at the onset of the industrialization process, he finds that the concept of labor had a substantially different meaning in Britain and Germany, but that these differences originated in on the ground practices by workers and employers rather than in some preexisting mental categories. These practical conceptions, derived from the material context of industrialization in each country, tended then to crystallize into full fledged meaning making systems, which became eventually codified in writing by political economists and other intellectuals. Through this process they acquired a great cultural depth, and ended up shaping a whole set of outcomes in the development pathways of the two countries, such as the wage calculation system, disciplinary techniques within factories, forms of workers’ collective action, and even industrial architecture. Yet, even then, the systems remained vulnerable to a change in practices (which eventually took place in the early twentieth century).

Emergence of Culture within the Economy

Biernacki’s study illustrates particularly well the fact that we should think about the role of culture primarily through its inscription in practices. Economic settings, therefore, do not simply display, or reflect, preexisting cultural understandings, but should be regarded as places where distinctive local cultures are formed and carried out. There are two main ways in which this point has been articulated in the sociological literature. The first emphasizes the social meanings people produce (whether voluntarily or involuntarily) through their use of economic settings and economic objects, and is best illustrated by consumption studies. The second suggests that some form of social order (i.e., regulating norms and practices) emerges out of the interpersonal interactions that take place within economic settings, particularly formal organizations and markets.

The first set of questions goes back to Veblen’s (1994) and Simmel’s analyses of consumption, and was most noticeably extended by Bourdieu (1984). The fundamental idea here is that consumption is not about individual parameters (preferences, income), but is profoundly relational. Consumption practices are the site of a competitive struggle whereby individuals seek to position themselves vis a` vis other individuals in the social space. For Veblen (1994), it is essentially about vertical hierarchy – leisurely elites seek to demarcate themselves from those below them by wasting money and time on perfectly useless purchases and activities. For Bourdieu, the structure of the social ‘‘space’’ is more complex: education and socialization into high culture (or not) play as much a part as money in determining taste, and beyond, consumption practices. What structures consumption practices (as all forms of action), then, is what Bourdieu calls habitus – a system of dispositions that is formed through the individual’s trajectory in the social space (under stood, again, in a relational manner vis a vis other individuals).

The study of consumption practices thus provides an extraordinarily rich terrain for analyzing how people relate to one another, both structurally and cognitively. In a creative variation on this theme, Zelizer (1985, 1994) has shown that these relational meanings are not only expressed through what people purchase, but often in how they pay for it – cash, gift certificates, checks, food stamps. People, in fact, constantly personalize, differentiate, and earmark money in ways that can be understood as metaphors about social relations and identity. (Whether the how, like the what, is also subject to the logic of habitus, remains to be studied systematically.)

The second question – the cultural universe produced within and by economic institutions – has also given rise to a diverse and extremely rich literature. We may illustrate this point with three examples: antitrust law, financial markets, and the McDonald’s corporation. Fligstein (1992), most prominently, has studied the way in which the legal environment shapes the formation of distinctive economic cultures. Corporate managers, he argues, act on the basis of ‘‘conceptions of control’’ – shared under standings about how a particular market works. These conceptions evolve in close connection with changes in the legal regulation of corporate competition, which tip the balance of power toward management groups with certain organizational cultures at the expense of others. In the course of the twentieth century, for instance, the American corporation was a contested and historically evolving cultural terrain, where conceptions of control shifted from production to sales and marketing, and finally finance and shareholder value. In this case, organizational culture fundamentally emerges out of a combination of institutional forces and power struggles.

Of course, such tacit understandings and patterned practices may emerge in a more decentralized way, out of interpersonal interactions in corporations, factories, workshops, and markets, including the most ‘‘rational’’ ones. Sociologists, for instance, have revealed the existence of all kinds of rituals, beliefs, customs, and informal control structures that regulate social life in the financial markets – the very heart, supposedly, of instrumental action. In fact, the economic potential of culture has not been lost on corporations, many of which try actively to ‘‘engineer’’ predictable behaviors and commitments on the part of their employees through the use of quasi religious rituals and the enforcement of strict codes regulating social interactions.

The organizational innovations introduced by the McDonald’s corporation are probably among the most potent examples of the cultural effects of corporate logics. As Ritzer (2004) has shown, they had a dramatic effect on human experience and social organization well beyond the boundaries of the firm of origin, helping spread the values and practices of efficiency, calculability, predictability, and control to various organizations and social institutions (education, medicine, and the criminal justice system), both in the US and abroad. The sheer success of this model is thus a precious reminder that instrumental rationality – as Weber worried – is also a very powerful ‘‘culture’’ in and of itself.

The Economy as the Culture of Modernity

The example of McDonald’s suggests a broader point, then: the constitution of economic categories themselves is through and through a social process. Consequently, what gets incorporated (or not) into the sphere of the market place reveals much about how we understand ourselves, about our ‘‘culture.’’ As Polanyi (2001) argued long ago, the hallmark of post eighteenth century modernity was the emergence of a distinctive social order dominated by market relations. Following nineteenth century critics (among them Marx, Weber, and Simmel), Polanyi articulated the dehumanizing effect of modern capitalism and calculative rationality on personality and human relations, whereby individuals come to be seen as commodities and means to an end rather than as ends in themselves.

Empirically, however, there is quite a bit of debate about whether such effects really exist: recent economic experiments in small scale societies, for instance, have suggested that market integration is positively correlated with human cooperation (Henrich et al. 2004), thereby vindicating earlier commentaries about the civilizing (Hirschman 1977) and socially integrating effects of commerce. It is also unclear whether the penetration of markets has been as universal and far reaching as some skeptics believe. Modernity certainly does not mean that everything has been engulfed into the sphere of the marketplace; for instance, the study of the conditions under which boundary ‘‘objects’’ such as children, death, organs, or art are subject to economic exchange has revealed a quite varied landscape. Hence, as sources of economic benefit, children were removed from labor markets around the turn of the twentieth century in the US (and countries that continue to authorize such practices today face grave political and economic pressures). On the other hand, as sources of emotional and social benefit, they were com modified in ways that were not foreseen in the nineteenth century, mainly through the adoption, insurance, and consumption markets (Zelizer 1985).

The intellectual challenge, then, is twofold: to specify the distinctive nature of the moral order capitalism relies upon, and to understand how it is produced. Perhaps this challenge is nowhere as obvious as in the current emergence of a new vocabulary that seeks to overcome the conceptual divide between culture and economy, and focuses instead on the always inextricably moral dimensions of economic discourses and practices (Amin & Thrift 2004). Particularly noticeable is the work on logics of moral justification, which identifies the recent appearance of the discursive figure of ‘‘connectivity’’ as a new regime of justification conceived in and for the post industrial capitalist economy (Boltanski & Chiapello 2005). Dezalay and Garth (2002) explore another exciting avenue in their analysis of the mutually reinforcing, profoundly entangled discourses of economic and political individualism (e.g., human rights and the market) and their world wide diffusion under US hegemony. Finally, Callon (1998) and others have investigated the performative nature of the knowledge forms that sustain the development of capitalism, mainly economics and accounting. They have shown that through their language, techniques, and representations, these disciplines produce a world of ‘‘calculative agencies’’ and create a host of new institutions in which these agencies may exercise their calculative power – thereby formatting, little by little, our cultural selves onto the model fiction of homo economicus. This outburst of work seems to signal that sociology is finally ready for a new form of engagement with economics that will demystify it as a cultural form, as the discursive rationalization and active formatting, by capitalism, of itself and for itself – not merely the science of how the economy ‘‘works.’’